The Massey Affordability Index takes into account the cost of borrowing as well as house prices and wagelevels. Key points from the report can be seen on the left.
The report shows that this December quarter (2016) has seen a decline in affordability driven mainly by the continued spillover of the Auckland house price levels into the regions. Overall, home affordability declined by 2.8% in this quarter withsome big declines in the provincial centres of Taranaki (12%); Northland (9.7%); Southland (6.7%); Nelson/Malbrorough (6.2%); and Manawatu/Wanganui (6%).
Affordability did improve in this quarter in Central Otago Lakes and Auckland. Central Otago Lakes improved by 7.3% and Auckland improved slightly by 1.1%. Auckland and Central Otago Lakes do, however, remain the least affordable regions in the country, 56% and 45% less affordable than the rest of New Zealand.
You can find the report here.
The latest Demographia International Housing Survey confirmed what we know – house prices in Auckland have risen much faster than incomes. So much so, that Auckland is the fourth least affordable city in a survey of 92 cities around the world.
Shamubeel Eaqub says in this opinion piece here, that the causes for the housing crisis have been well covered. Housing supply is too slow because of ineffective regulation, while demand is too high because of our culture, tax incentives and bank lending biases towards existing homes over new builds and businesses.
Similarities across some markets around the globe show that the drivers are not necessarily unique to New Zealand, but often the underlying causes are much the same – the economies are successful, populations are growing, and home owning and investing cultures and housing supply is unresponsive.
